"Dairy Compacts are Back," Sensenbrenner Warns

"Dairy Compacts are back," Sensenbrenner Warns

(Washington, DC) -- Earlier this week, Representatives and Senators from the Northeast part of the country introduced
a bill that they hope will replace the now-defunct Northeast Interstate Dairy Compact (the Compact). This legislation,
entitled the National Dairy Equity Act (NDEA), will subsidize dairy farmers based on what region of the country they
live in through an assessment placed on milk processors. Under this proposal, the current Milk Income Loss Contract
(MILC) program would expire in September 2005.

The NDEA will establish regional boards with the authority to require processors to pay a higher price for Class I milk,
which is sold for fluid use. Money collected from this "milk-tax" would be used to subsidize some farmers. The
NDEA would rely on price triggers-when the price of milk falls below the trigger price (which would be different in
each region), farmers would receive payments under the program. This program would raise the cost of milk for
consumers who are already burdened with high milk prices.

"When I became Chairman of the House Judiciary Committee, I promised to do everything I could to end the Northeast
Interstate Dairy Compact, and I lived up to that promise," said Sensenbrenner.

"Although the NDEA doesn't include the word compact in its title, the bill's effect mimics regional dairy compacts,"
Sensenbrenner continued. "This legislation creates regional boards that establish regional prices to pay farmers money
when the price of milk falls below a regionally established trigger price. Moreover, the money to farmers comes from
assessments-which is another word for taxes-to milk processors."

"In Wisconsin, we produce a lot of milk and we do it efficiently, which is why our farmers do well when we have a
level playing field across the country. Breaking up our nation into regions doesn't benefit Wisconsin farmers, and in
fact hurts Wisconsin processors and consumers because they both end up paying higher prices for milk. Since the
National Dairy Equity Act sounds like a compact, and acts like a compact, I can only surmise that it is a compact, and I
don't like it one bit," Sensenbrenner concluded.